TOTALITY OF INFRACTIONS PRINCIPLE APPLIES EVEN THOUGH THE CURRENT OFFENSE COMMITTED DOES NOT WARRANT DISMISSAL FROM EMPLOYMENT

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Totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee’s past misconduct and present behavior must be taken together in determining the proper imposable penalty.

Hence, the Supreme Court (SC) held in the following case:

Naren Villanueva vs. Ganco Resort and Recreation, Inc.
G.R. No. 227175, January 8, 2020

Totality of infractions principle; Transfer; Insubordination; Habitual neglect; Absences without leave (AWOL); Procedural due process; Prescriptive period for money claims; The three-year prescriptive period commences not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave, but only from the time the employee becomes entitled to the commutation of his service incentive leave, i.e., from the time he demands its commutation or upon termination of his employment, as the case may be

Facts:

Respondent Ganco Resort and Recreation, Inc. (GRRI) hired Petitioner Naren Villanueva as a part-time employee in its resort, La Luz Beach Resort and Spa (La Luz Resort). She became a regular employee and was eventually promoted as head of the Housekeeping Department and as head of the Front Desk Department.

Sometime in 2013, Villanueva was charged with violating company policies, i.e., abuse of authority, when she rejected walk-in guests without management approval, and threat to person in authority, when she threatened the assistant resort manager, GRRI Serge Bernabe (Bernabe), with physical harm. After the conduct of administrative investigation, GRRI found her guilty of both charges and was meted the penalty of two days suspension without pay for abuse of authority and termination for threat to person in authority. The penalty of termination was, however, reduced to a five-day suspension without pay subject to the agreement that she would be under strict performance monitoring and that any further violation which would warrant suspension would be elevated to immediate dismissal. After serving her suspension, she resumed her task as a receptionist.

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In the early part of 2014, Villanueva was transferred from the Front Desk Department to the Team Building Department upon the advice of Bernabe. Thereafter, GRRI implemented a reorganization in La Luz Resort and issued a Notice of Employees’ Lateral Transfer (Notice of Transfer) to five of its employees,including Villanueva. She was transferred from the Reception Department to Storage Department without diminution in rank and benefits.

However, Villanueva refused to sign the Notice to Transfer and remained at the reception area for two days before reporting to her new station. She also sent an email addressed to the management asking questions regarding her transfer. Thereafter, a Memorandum was issued to Villanueva directing her to explain within 24 hours from notice why she should not be penalized for insubordination for her repeated failure to sign the Notice to Transfer. In her handwritten letter, Villanueva explained that she refused to sign the Notice to Transfer pending answers to the questions she sent to the management via e-mail.

GRRI also issued Villanueva a Notice of Preventive Suspension placing her under preventive suspension pending resolution of the charge against her. Villanueva, however, failed to report back to work after the lapse of the period of her preventive suspension. Thus, GRRI’s Human Resource (HR) department issued Villanueva another Memorandum directing her to report to the HR department within 24 hours and to explain her absences without leave. Upon reporting thereat, Villanueva was handed the Termination Notice advising her that the management found her guilty of “inhuman and unbearable treatment to person in authority; abuse of authority; serious misconduct -insubordination by not accepting her memorandum of re-assignment by the Executive Committee; and gross and habitual neglect of duties -AWOL” and had decided to terminate her from employment effective immediately.

Thus, Villanueva filed a complaint for illegal dismissal and money claims (i.e., underpayment of wages, non-payment of overtime pay, rest day premium and service incentive leave pay, unfair labor practice, damages, and separation pay).

LA Ruling:

The Labor Arbiter (LA) found that Villanueva was illegally dismissed and directed GRRI, et al. to pay Villanueva full backwages, separation pay, and unpaid service incentive leave.

The LA held that Villanueva’s failure to sign the Notice to Transfer does not in itself constitute serious misconduct and willful disobedience for her act is neither willful in character nor does it  imply a  wrongful intent. Furthermore, the facts of the case show that Villanueva abided with the order of transfer despite her refusal to sign the Notice to Transfer, and that no harm or prejudice was caused to GRRIs by reason of Villanueva’s act.

GRRI, et al. appealed the LA’s Decision with the National Labor Relations Commission (NLRC).

NLRC Ruling:

The NLRC affirmed the LA’s findings but modified the award of damages by deleting the award of separation pay.

The NLRC held that while the totality of infractions may justify an employee’s dismissal, past infractions for which an employee has already been penalized, as in this case, can no longer be cited as bases for the present offense and cannot be collectively taken to justify an employee’s termination. The NLRC also concurred with the LA that Villanueva’s failure to sign and accept the Notice to Transfer is not per se serious misconduct and willful disobedience.

Likewise, the NLRC found no basis to dismiss Villanueva on the ground of gross and habitual neglect of duties. However, the NLRC held that Villanueva cannot be left completely unaccountable for the two-day delay in complying with the transfer as well as the confluence of her actions revealing a brashness of language and tone. Thus, the NLRC found it just and proper to impose a penalty of three months suspension without pay on Villanueva, which is deemed to have been completely served during the pendency of the case.

Lastly, the NLRC deleted the award of separation pay because there is no showing of strained relations between Villanueva and GRRI, et al., and considering also that Villanueva has already been reinstated in the payroll of GRRI upon the latter’s receipt of the LA ruling.

Aggrieved, GRRIs sought reconsideration of the said decision but this was denied. Thus, GRRIs filed a petition for certiorari before the Court of Appeals (CA).

CA Ruling:

The CA reversed and set aside the NLRC ruling and upheld the validity of Villanueva’s dismissal.

The CA held that the NLRC abused its discretion when it failed to apply the principle of totality of infractions and in ruling that Villanueva was illegally dismissed from employment. According to the CA, Villanueva was already given a stern warning that her next violation of the company policy would warrant her immediate dismissal. The CA found Villanueva’s refusal to sign the Notice to Transfer as amounting to insubordination or willful disobedience.

Thus, her previous infraction of refusal to accept walk-in guests, taken in conjunction with her manifest refusal to accept her new assignment pursuant to the Notice to Transfer, served as valid grounds for her dismissal from employment.

Villanueva filed a motion for reconsideration but the same was denied in a Resolution. Hence, the Petition before the Supreme Court (SC).

Issue/s:

Whether or not the employee can be dismissed for insubordination or willful disobedience for refusal to sign the Notice to Transfer on the ground that she was awaiting answers to the questions she raised to the management

Whether or not there is basis to impose a penalty of suspension for employee’s delay in assuming her new role although she was not cited for such act

Whether or not an employee can be dismissed for gross and habitual neglect of duty based on four (4) days of absences

Whether or not an employee can be dismissed from service under the totality of infractions principle if she committed four (4) days of absences despite warning that the next offense would warrant the penalty of dismissal

Whether or not there was violation of procedural due process when the termination notice cites four grounds but the Memorandum charged only refusal to sign Notice of Transfer

Whether or not there was violation of procedural due process when the employee was only given 24 hours to submit an explanation

Whether or not there was violation of procedural due process when no administrative hearing was held or even scheduled

Whether or not there was violation of procedural due process when the Termination Notice already cited absences without leave as ground for dismissal even before the employee was given opportunity to be heard

Whether or not the three-year prescriptive period to claim SILP commences at the end of the year when the employee becomes entitled to the commutation of service incentive leave or from the time the employee becomes entitled to the commutation of his SIL

SC Ruling:

The SC partly granted the petition by affirming the Decision of the CA with modification.

The records of the case show that Villanueva was charged with two infractions, i.e., (l) insubordination forher failure to sign the Notice to Transfer and (2) habitual neglect for her absences without leave from March 22 to March 26, 2014, as shown by the two memoranda served on her. ”

In the Memorandum dated March 10, 2014, GRRI charged Villanueva with insubordination for her refusal to sign the Notice of Transfer which amounts to a non-compliance with procedure. Insubordination or willful disobedience requires the concurrence of the following requisites: (1) the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a “wrongful and perverse attitude”; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. Both requirements are not present in this case.

As stated by Villanueva in her handwritten explanation, she withheld her signature on the Notice to Transfer because she was awaiting answers to the questions she raised to the management via e-mail. She cannot be forced to affix her signature thereon if she does not really fully understand the reasons behind and the consequences of her transfer. While her action is willful and intentional, it is nonetheless far from being “wrongful and perverse.” In addition, GRRI, et al. failed to prove that there is indeed an order or company procedure requiring a transferee’s written conformity prior to the implementation of the transfer, and that such order or procedure was made known to Villanueva.

Given the foregoing, there is no basis to dismiss Villanueva on the ground of insubordination for her mere failure to sign the Notice to Transfer. The SC held further that there is also no basis to impose a  penalty of three-month suspension without pay on Villanueva for her delay in assuming her new role at the Storage Department considering that she was not even cited by GRRI for said act. GRRI is  already deemed to have waived its right to terminate or discipline Villanueva on such ground. The case of Exocet Security and Allied Services Corp. vs. Serrano is instructive on this matter. Thus, the CA erred in imposing a three-month suspension without pay on Villanueva.

Anent the charge of habitual neglect for Villanueva’s absences without leave, jurisprudence provides that in order to constitute a  valid cause for dismissal, the neglect of duties must be both gross and habitual. Gross negligence has been defined as “the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.” On the other hand, habitual neglect “imparts repeated failure to perform one’s duties for a period of time, depending on the circumstances.” A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.

Villanueva’s four-day absence without leave is not gross nor habitual. Even so, Villanueva’s absences are still not justified. Villanueva alleged that she did not report back to work after serving her preventive suspension because the management did not reply to her query as to when she needed to report. This reasoning does not justify her absences. The Notice of Preventive Suspension served on her clearly stated that the period of her preventive suspension was from March 14 to March 21, 2014. Thus, she was expected to report back to work on her next working day. Yet, she reported only on March 26, 2014. Therefore, while there may be no basis to dismiss her on the ground of gross and habitual neglect, Villanueva is still guilty of having committed a violation. It is here that totality of infractions may be considered to determine the imposable sanction for her current infraction.

In Merin vs. National Labor Relations Commission, the Court explained the principle of “totality of infractions.” The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee’s past misconduct and present behavior must be taken together in determining the proper imposable penalty.

The totality of an employee’s infractions is considered and weighed in determining the imposable sanction for the current infraction. It presupposes that the employee is already found guilty of the new violation, as in this case. Apropos, it is also worth mentioning that GRRI had already previously warned Villanueva that the penalty for her next infraction would be elevated to dismissal. Thus, the dismissal of Villanueva, on the basis of the principle of totality of infractions, is justified.

However, the Court notes that Villanueva’s dismissal is tainted with numerous procedural lapses. The Court delineated the requirements of procedural due process m King of Kings Transport, Inc. v. Mamac. Highlighted in said case, the Supreme Court held that the first written notice to be served on the employees should contain the specific causes or grounds for termination against them. The notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, arc violated and/or which among the grounds under Art. 282 [now Art. 297] is being charged against the employees.

The records show that GRRI failed to observe the foregoing requirements. First, while the Termination Notice cited four grounds for Villanueva’s dismissal, the Memorandum dated March 10, 2014 only charged Villanueva with insubordination for her refusal to sign the Notice to Transfer. Second, Villanueva was only given 24 hours to submit an explanation. Third, no administrative hearing was held, or even scheduled. Lastly, the Termination Notice already cited Villanueva’s absences without leave as ground for her dismissal even before she was even given any opportunity to be heard. Considering that a valid cause for Villanueva’s dismissal exists but the requirements of procedural due process were not observed, the award of nominal damages in the amount of P30,000.00 is in order.

With respect to Villanueva’s claim for SILP, the Court finds that the same is in order. In RTG Construction, Inc. v. Facto, the Court awarded money claims, particularly SILP, despite the validity of the employee’s dismissal. The first paragraph of Article 95 of the Labor Code provides that every employee who has rendered at least one year of service shall be entitled to a yearly incentive leave of five days with pay. In the present case, Villanueva had been in the employ of GRRI since 2002, or for 12 years, hence she is entitled to SILP. Considering that Villanueva is claiming non-payment, the burden also rests on GRRI, as the employer, to prove payment. Since, GRRI has not shown any proof that it has paid Villanueva SILP or that it  is exempted from paying the same, the CA erred in deleting the award of SILP. However, the computation of the LA, as affirmed by the NLRC, must be modified conformably with Auto Bus Transport Systems, Inc. v. Bautista.

The LA’s computation of SILP due to Villanueva is limited only to three years, citing Article 291 of the Labor Code which provides for the three-year prescriptive period for money claims. However, in Auto Bus Transport Systems, Inc. v. Bautista, the Court held that the three-year prescriptive period commences not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave, but only from the time the employee becomes entitled to the commutation of his service incentive leave, i.e., from the time he demands its commutation or upon termination of his employment, as the case may be. This pronouncement has also been affirmed by the Court in Rodriguez v. Park N Ride, Inc. Thus, the computation of Villanueva’s SILP should cover the period from the beginning of her employment until its termination.